At a recent Berkshire Hathaway annual shareholder meeting, Warren Buffett shared his thoughts on why he sees financial advisors as the worst people to trust with your money.
Buffett believes that financial professionals in aggregate can’t do better than the aggregate of the people who just sit tight.
David agrees with Buffett’s view on active versus passive investing.
According to David, Buffett’s point of view and approach don’t account for the high cost of investor behavior.
The fact that 90% of investment decisions are driven by emotions is a big problem David sees in Buffett’s line of thinking.
David sheds light on what has become known as the Prospect Theory.
What leads “DIY investors” to buy high and sell low, instead of buying low and selling high as logic would suggest? David shares his thoughts on the matter.
Adopting an index-based, Do-It-Yourself, motion-driven approach to investing will make you less likely to remain invested during extreme market volatility.
For David, one of the main purposes of a financial advisor is to hold your hand and keep you invested during jittery periods in the market.
Mentioned in this episode:
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Warren Buffett
Berkshire Hathaway
The Five Things Your LIRP Must Have
Catch 22: Inflation or Recession?
The Dave Ramsey Buy Term and Invest the Difference Fallacy
Could Inflation Lead to Higher Taxes?
The Biggest Objection to a Tax-Free Retirement
The Truth About Municipal Bonds
The Tax Freight Train Bearing Down on Your Retirement Plan
The Truth About Dave Ramsey
What is the Obamacare Surtax (And Should You Worry About It)?
When Should You Draw Social Security in a Rising Tax Rate Environment?
Should High Income Earners Do Roth Conversions?
A Huge Surprise in the Secure Act 2.0
When is the True Fiscal Day of Reckoning for Our Country?
The LIRP vs Stock Market Investing
Effective Tax Rate vs Marginal Tax Rate in POZ Planning Decisions
How to Avoid Sequence of Return Risk in Your LIRP
Two Ways to Use the LIRP to Get to Tax-Free
Can Mitt Romney Save America?
How to Best Position the LIRP in Your POZ Strategy
The POZ Moves You Should Be Making Right Now
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